New research from Sony Professional Displays and Solutions dives into the priorities and preferences of both retailers and consumers across Europe, revealing the beginning of a shift in omnichannel balance between in-store and online shopping. In tandem with Censuswide, Sony’s State of Retail Technology Report 2024 surveyed just over 1,000 respondents across retail technology decision makers and consumer shoppers in Europe to get a clearer view of shopping preferences, priorities and how macroeconomic factors have had an impact.
The epic rise of ecommerce has long presented a continually evolving challenge for high street retailers and shopping malls. Its convenience, competitive pricing and data-led personalised customer journeys have had a big impact on consumer behaviour. This has historically led to a decline in footfall and in-store share-of-wallet, and ultimately has seen some stores closing their doors around the world. However, we may be seeing the start of a shift in this story as of those European retailers surveyed, 50% hadn’t experienced any closures in the last 12 months (44% in the UK) and, in fact, 3% had even seen new store openings (only 1% in the UK).
Today’s consumers expect seamless brand experiences
Just over half (57%) of consumers across Europe – and 49% in the UK – stated that the rising cost of living was stopping them from shopping in-store. And with over half (57% across Europe; 53% in the UK) also agreeing that the biggest draw for using online shopping is the attractive pricing with lower premiums, the story is becoming clearer. Part and parcel of online retail’s aggressively cheap go-to-market is the ability to follow a customer’s wants, desires and activities through automated online customer journeys that can almost guarantee a sale by putting the right product and the right price under a customer’s nose at the right time; so how can in-store retailers compete?
Well, two fifths of consumer respondents across Europe (40%) and nearly half (45%) in the UK state that not being able to try on clothes before they buy negatively impacts their experience of online shopping, as well as 45% of European respondents and 50% in the UK saying that not being able to assess the quality of an item before buying is another negative point to the ecommerce experience. These are clear opportunities for in-store to work in harmony with online, especially when over a fifth of European respondents – and two fifths in the UK – admit to preferring to “browse” on the high street, but there are some reasons consumers might overlook these and opt for online:
- 41% stated that retailers should prioritise loyalty and reward schemes (51% in the UK)
- 24% stated that being able to buy online and return in store would make them more likely to shop in person (22% in the UK)
- 16–24-year-olds expressed the importance of brand loyalty, with one-fifth (20%) stating they would visit the high street for a specific brand
- 37% stated that they would choose in-store shopping over online for general browsing
Why retail businesses need to shift their priorities
There is a clear demand from today’s consumers for their in-store shopping experience to better reflect the seamless experience delivered when online shopping. In fact, 66% of European retailers in the survey (61% in the UK) acknowledged this, stating that they didn’t think they had the necessary technology in place to achieve a great customer journey in-store.
Despite clear opportunities for retailers to increase footfall and sales in-store, E-commerce remains a priority for investment (33% of European respondents; 36% in the UK) over in-store technology (32% across Europe, 34% in the UK). But, with non-technology related in-store enhancements the highest selected priority among retailers (50% across Europe; 51% in the UK), it suggests a huge disconnect between store owners’ priorities and shoppers’ needs.
One reason for this could be the lack of prioritisation over sustainability; a topic at the top of everyone minds and particularly among the younger generation, dubbed the ‘climate change generation’. Just 1% of retail stores surveyed stated that they would invest in technologies to aid sustainability initiatives within the next twelve months and, when asked more specifically about longer-term plans, 83% across Europe and 86% in the UK stated that they had no plans to invest in technology to aid sustainability initiatives.
Brick-and-mortar stores are competing with ever-evolving technological advancements of online stores, so they need to be looking into how they don’t fall behind and capitalise on the new, positive sentiment shift from consumers toward in-store shopping. With 15% admitting that a concern for brick-and-mortar stores is the lack of accurate customer journey mapping and 19% stating that just finding the right in-store tech to improve customer service was difficult, it suggests that some retailers are starting to align with consumer demand, but are they reacting quick enough?
“Replicating the seamless tech-powered customer journey of ecommerce in store and making ethical decisions as a brand that align with today’s consumers will be key in a world where fast-fashion and sustainability is being increasingly scrutinised by Gen Z shoppers,” says Thorsten Prsybyl, European retail sales manager at Sony Professional Displays and Solutions. “The results indicate that retailers aren’t adapting to the changing demands of consumers fast enough. The danger is that, if they don’t keep up, they risk losing the loyalty of their customers. But alongside this danger, there is equally a great opportunity to be had here. Brands that separate themselves from the pack and invest in improving their store experiences will gain a clear competitive advantage by future-proofing their brand.”
Opportunities lay ahead
Over one fifth (22%) of consumer respondents overall – and 40% in the UK – said that they would visit the high street just to browse or shop more generally. This presents retailers with an opportunity to capitalise; with the right smart in-store technology, stores can make sure that those browsing catch its latest products, store promotions and sales.
Beyond this, the allure of quick and easy online shopping seems to be waning amongst the consumer base as consumers reported their growing frustrations with online shopping, with 40% across Europe and 45% in the UK stating that not being able to see or try on clothes before purchasing negatively impacts their online buying experience as well as cost and inconvenience of returns (both 25%).
This makes clear the gaps in the online shopping experience where in-store retailers have the advantage. However, stores cannot rest on this alone. In recent years, online retailers have caught on and now offer ‘try before you buy’ services, emphasising the importance of in-store retailers needing to constantly evolve with changing consumer demand.
Experiences and quality interactions are still important to consumers and almost one third agree, with 31% of European respondents and 35% in the UK stating that they’d be more likely to visit in-store over online if they had high-quality customer service. For retailers, brand loyalty and delivering seamless omnichannel experiences should be prioritised to see positive change.
A matter of cost
Retailers acknowledge the significance of customer service and power of technology to improve it, but cost is a challenge for some. One fifth of retailers (20% across Europe and 22% in the UK) stated that costs associated with implementing in-store tech to improve customer service was a major concern. Other major concerns included the cost of delivering an omnichannel experience (15% across Europe; 23% in the UK) and the overall impact of soaring rent and leasehold prices (29% across Europe and 32% in the UK). So, on both sides of the coin there’s a tussle between better investment in long-term quality whether it be the products people are buying or the in-store tech retailers invest in, striking the right balance between the two is paramount for retailers looking to get ahead of competition.
“When faced with budget restrictions, it can be easy to negate spending more than you need to get by on a day-to-day basis. However, it’s become clear from this survey that brick-and-mortar stores need to shift their priorities to align better with that of the consumer,” says Prsybyl. “Retailers who make changes now will reap the benefits in the long-term. By implementing in-store technology that can revitalise the in-store experience, better track the overall customer journey and aid the integration of more sustainable practices, stores could better connect and harmonise their offerings alongside online retail.”
“Digital signage is set to play a pivotal role in the retail consumer experience. As retail environments are evolving, digital signage provides consumers with dynamic, personalised content that will not only create a more engaging and immersive experience but has the ability to align the in-store experience with online channels and campaigns,” adds Nikki Blissett, head of marketing at Xibo Signage. “Building digital signage into the omnichannel strategy, enables retailers to increase footfall and share of wallet through unique brand retail experiences. Digital signage and DooH advertising provide a seamless integration with physical and digital customer touch points. With the ability to synchronise promotional content, product offers and deliver targeted content through the use of AI sensors, digital signage will provide retailers with the opportunity to build a stronger brand presence and enable consumers to make more informed purchasing decisions.”
